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Home » 2018 Election Activities, Environmental Protection Agency, Federal Agency, Federal Regulation, Iowa, Opinions, Policy, White House

Grassley vs Pruitt: Will Billionaire Bailouts or Biofuels Prevail?

Submitted by on May 16, 2018 – 11:16 amNo Comment

by Jim Lane (Biofuels Digest)  Trump in a pickle: support his beleaguered EPA Administrator over oil refinery bailouts, or rally his Midwestern farm-state base?  —  In Washington, Senator Chuck Grassley of Iowa tweeted:

“I’ve supported Pruitt but if he pushes changes to RFS that permanently cut ethanol by billions of gallons he will have broken Trump promise & he should step down & let someone else do the job of implementing Trump agenda if he refuses.”

Grassley explicitly called on Pruitt to back a key campaign pledge from 2016 that helped unlock farm state support and propel Trump into the White House.

1/19/16 Trump at IA Renewable fuels summit: EPA shld make sure blend levels match statutory level set by Congress THAT’S 15B GALLONS/Pruitt shld work hard to make sure he doesn’t undercut the president’s support of ethanol.

Grassley added, “if Administrator Pruitt refuses to follow the spirit of the law – Congressional intent – then he is breaking his word to lawmakers and he’s breaking the President’s commitment to 15 billion gallons for ethanol under the Renewable Fuel Standard. If Administrator Pruitt isn’t committed to keeping his promises, isn’t committed to following the law as intended by Congress and isn’t committed to implementing the President’s agenda, he should step aside and let someone else do the job.”

The biofuels brouhaha is beginning to lay a shadow over GOP efforts to bolster farm-state support as November elections begin to draw near.

The background?

A series of secretive, oil refinery waivers from complying with Renewable Fuel Standard biofuels mandates that have been granted in recent months. The exact number of waivers is unclear, and EPA isn’t clearing up the mystery. Some sources have speculated that as many as 40 waivers have been granted, with as much as 1.3 billion gallons of demand taken off the table, or 8% of US biofuels demand.

The brinkmanship between Administrator Pruitt and Senator Grassley follows a White House meeting at which President Trump committed to Administration to approving year-round E15 ethanol, but the potential 7 billion gallons expansion in biofuels blending will take time to implement and producers are up in arms over the near-term demand destruction created by the small refinery waivers. More on that deal here.

Under the Energy Security and Independence Act, the EPA Administrator has the right (but not an obligation) to issue waivers to refineries with less than 75,000 barrels per day in production, but only if those refineries can demonstrate severe economic hardship.  READ MORE

Republican senator says EPA chief must slow refinery waivers or resign  (Reuters)

EPA chief back on defensive over security, ethics (Argus Media)

Small Refinery Exemption Study: An Investigation into Disproportionate Economic Hardship (March 2011 by the Office of Policy and International Affairs U.S. Department of Energy)

Excerpt from Office of Policy and International Affairs U.S. Department of Energy:  Disproportionate economic hardship for small refineries was characterized by increased cost of compliance to the point that the current or future viability of the refinery is impacted. In the current lower refining margin environment, the cost of RFS2 regulations could have a material effect on small refinery profitability. …

Small refineries can suffer disproportionate economic hardship from compliance with the RFS program if blending renewable fuel into their transportation fuel or purchasing RINs increases their cost of products relative to competitors to the point that they are not viable, either due to loss of market share or lack of working capital to cover the costs of purchasing RINs.  READ MORE

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